How to Budget for Christmas Without Breaking the Bank

From time to time we like to invite local experts from the community to answer questions about parenting and raising kids in Huntsville and North Alabama. Today we asked Valerie Christensen, Assistant Vice President and Branch Manager with Progress Bank, for her tips on how to budget for the holidays and Christmas season.

Before you dive into all the sales and deals during the Christmas and Holiday shopping season, it’s important to know exactly how much you have to spend. Making a spending budget can be overwhelming, but there are plenty of tips to help your holiday be merry and bright!

Creating Your Holiday Budget

Not sure exactly how much your Christmas present budget is? This handy cash flow analysis calculator can help you create a budget to work with. The Penny Hoarder also has a fantastic budgeting worksheet if you want to do a deep dive into Santa’s seasonal expenses.

An Important Note About Credit Cards

If your holiday budget includes using your credit card, take a look at two things:

  1. Which card has the lowest interest rate on purchases and/or…
  2. Which card offers you the most perks for your spending (percentage of cash back, points, etc.)

I personally would opt for using the card with the lowest rate, but if they are all very similar, then the rewards program is something to consider. This also brings up another great point – if you’re a regular disciplined credit card user throughout the year, and you have earned points or cash back towards gift cards, NOW is the time to redeem and use those gift cards as gifts or to supplement your shopping budget.

Once January hits, add up what you put on credit cards and come up with a plan to pay it off as soon as possible – 6 months or less. Then, make sure you set aside small amounts of income at regular intervals throughout the year so next year’s holiday season finds you financially festive!


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You’ve Got a Holiday Budget. Now What?

Assuming you already know how much money you’ve set aside for Christmas and Holiday expenses, these tips can help you stick to that budget.

1. Make a Person List
Make a list of every possible person you are shopping for. Don’t forget people outside the family such as teachers, babysitters, pastor, dog groomer, neighbors, or your favorite barista.


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2. Then Make an Item List
Jot down a list of gift ideas for everyone on your list. This can help categorize and prioritize and keep you from over-spending at the last minute. For example, if you settle on restaurant gift cards for several people, you can maximize by taking advantage of the restaurants that offer and additional $5 when you buy $25 or additional $20 when you buy $100. Those freebies can be used as gifts.

3. Plan for Postage
If you are buying and mailing, don’t forget to think about the cost of postage. These are the first gifts you want to take care of so you don’t overspend on last minute shipping. You might also want to consider having items gift wrapped directly from the retailer and shipped to the recipient. This can save time & money.

4. Price Track!
Start watching your favorite retailers and check those emails and apps for special discount days. This is especially important if you are buying something really specific. (Back to item 2: have an idea of what you want to get each person!) That Barbie Dream house is even better at 30% off 1 day only from Target!

5. Reduce, Reuse, Recycle
All that new wrapping paper is really pretty, but did you use up last year’s? If not, use that first, then hit up the clearance sales after the holidays to stock for next year.


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6. Nibbles & Sips Add Up
Don’t forget to budget extra for groceries and hostess gifts! Ingredients for party food can get costly – same for holiday libations – and that’s a sneaky place your budget can hemorrhage money.

7. Top Off with 10%
Every budget ends up with cost overruns. Set aside 10% for those last minute items as a safety net.

8. Give Back
This is the absolute best time of year to remember your favorite charities and causes and include them in your budget. Not only will you reap the benefits when it’s tax time, more importantly it’s what the season is all about! This list of local organizations can help.

ABOUT THE EXPERT: Valerie Christensen is AVP Branch Manager for Progress Bank’s Madison location. With over 12 years of banking experience and more than 20 years of customer service experience, Valerie is focused on delivering personalized service to assist customers with their financial goals. Born and raised in Illinois, Valerie relocated to north Alabama 15 years ago. She and her husband and two children reside in Madison and in their spare time enjoy cooking, gardening, home improvement projects and cheering for their favorite Illinois sports teams. Drawing from her years of experience, Valerie can provide solutions for all your financial needs.

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